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Orders of the Day

Town and Country Planning (Costs of Inquiries Etc.) Bill Order for Second Reading read.

4.6 pm

The Parliamentary Under-Secretary of State for the Environment (Sir Paul Beresford): I beg to move, That the Bill be now read a Second time.

The Bill is rather technical and in terms of its geographic spread it could probably be described as a wee Bill, but it has a clause 4! The Bill is extremely important because it proposes to remove a current source of uncertainty about who should pay for the services of a planning inspector appointed to hold an inquiry on a planning authority's behalf into objections to a development plan or other similar plan. It also applies to Scotland and Wales.

The history of the matter is worth a glance. Since the 1970s, when the first local plan inquiry was held under the then Town and Country Planning Act 1971, the Department and local planning authorities assumed that it was lawful on the basis of an implied contract to impose a charge for making the services of the inspector available. That seemed entirely natural as the planning authority was statutorily required to hold a development plan inquiry and should therefore expect to pay for the expense involved in the process, including the expenses of an inspector whom the Secretary of State appoints independently of the authority.

Some 21 years later, in 1992 and in the following year, Birmingham city council queried the amount charged by the Planning Inspectorate for the inspector appointed to hold the council's unitary development plan inquiry. Subsequently, the council questioned whether any statutory power existed to levy those charges. In support of the argument, the council cited the judgment of the House of Lords in the case of McCarthy and Stone (Developments) Ltd. v . Richmond upon Thames London borough council.

That judgment held that there is no power for a public body to levy a charge for its services in the absence of an express or implied statutory provision. Moreover, I am advised that although the Planning Inspectorate and the local planning authority normally agree on the terms on which an inspector is to be appointed for a development plan inquiry, there is no implied power to charge the authority for this service on any contractual basis.

When my right hon. Friend the Secretary of State and other colleagues were made aware of that legislative gap, the Government decided that the only reasonable course was to fill it as soon as parliamentary time became available.

Mr. Jeff Rooker (Birmingham, Perry Barr): I agree that the only reasonable course is to fill the gap, but surely it is unreasonable and wrong to apply backdating. I hope that the Minister will explain why the Bill has to be retrospective given that the supremely qualified staff of

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Birmingham city council, which has constantly been maligned by the Government, brought this matter to the attention of the House and the Government.

Sir Paul Beresford: I thank the hon. Member for that early and anticipated shot. I shall fire a reply in a moment or two. [Interruption.] I shall answer in a moment or two if the hon. Gentleman will just bide his time.

My hon. Friend the then Minister for Local Government and Planning announced in a written answer on 17 February 1994 the Government's intention to legislate on the issue in order to put the matter beyond doubt. [Interruption.] For the benefit of those hon. Members who are squawking, it is worth pointing out that the origin of the problem was in the drafting of the Town and Country Planning Act 1968. If there was sloppy drafting then, it was the fault of the Government of the day in 1968.

Following that announcement, we did not consult in detail with local authorities associations about the provisions to be included in the Bill, but no discourtesy was intended. There are three reasons to explain that. First, as my hon. Friend's written answer explained, the Bill simply restores the situation to what it was previously thought to be by all concerned in these matters. Secondly, the Bill will have no effect on public service manpower, as the explanatory and financial memorandum points out.

Thirdly, the agency's chief planning inspector informed all local planning authorities last year that the inspectorate would collect no further charges for development plan inquiries until the proposed legislation had been enacted. In the meantime, any local planning authority wishing to claim a repayment of its charge will receive it, but authorities have been advised to make full budgetary provision for the amounts that would be due to the Department if the proposed legislation were eventually enacted. This is, in effect, consultation in any event. Having changed sides from local government to central Government, I can fairly say that I have never known local authorities to be slow in responding when finances, either positive or negative, were concerned. We have not been flooded with complaints.

The sums at stake may not seem large in total local government public expenditure terms, but the underlying principle is important. In England and Wales, up to and including 1992-93, they amount to £4.5 million. For 1993-94, £1.4 million has been recovered from planning authorities and paid into a suspense account. A further £2.6 million is owing to my right hon. Friend's Department. In the current year--1994-95-- approximately £3 million will be due to the Department. In future years, charges will amount to approximately £3.6 million, on average, while the present development plan work load continues. The Department has repaid some £2.8 million to 97 local authorities, along with interest payments of approximately £101,000. The principle on which this Bill is based is that authorities should pay for the services that these charges represent and for which provision is currently made in the annual local government financial settlement.

Mr. Anthony Steen (South Hams): Is my hon. Friend saying that it is not just Birmingham that has not paid, but that a whole raft of local authorities have not paid

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and are deliberately avoiding paying, or is it simply that they have not been asked to do so?

Sir Paul Beresford: It is not quite as simple as that. Local government, trying to be at its best in managing its finances, has perceived an opportunity. About 97 local authorities have had money repaid, along with interest payments. If the Bill is not passed, that backpayment will not arise again--it will return to Government. Clause 1, which applies to England and Wales, is the core provision of the Bill. It does two things. First, it enables the Department to recover from planning authorities the costs that we bear, through the Planning Inspectorate, in appointing an inspector to hold what is called a qualifying inquiry. That is an inquiry set up to hear objections to local plans, unitary development plans or simplified planning zone schemes, to consider objections to such schemes or to conduct an examination in public into structure plan proposals. Secondly, the clause enables my right hon. Friend to provide, by regulations, the standard daily amount and the travel and subsistence allowances that planning authorities are to pay to persons, other than inspectors, who are appointed to conduct an examination in public into structure plans. I regret that the provisions of clause 1 will inevitably seem lengthy and detailed. It is felt that that is necessary to ensure that the provisions do the job properly this time and, so far as humanly possible, do not leave anything to chance. Clause 2, which also applies in England and Wales, deals with retrospection. If the hon. Member for Birmingham, Perry Barr (Mr. Rooker) pauses in his conversation, he will hear that the Government are persuaded that, exceptionally, retrospection is justified on this occasion for two main reasons. The first is that clause 2 imposes no new financial burden on local planning authorities. It simply validates past payments that authorities made in good faith, believing--as did the Department--that they were sought and paid lawfully. In that context, it is important to remember that provision was made in the annual local authority financial settlement for the estimated sums that planning authorities expected to incur by way of charges for inspectors' services at development plan inquiries.

Dr. Lynne Jones (Birmingham, Selly Oak): The Minister said that arrangements had been made to allocate resources to local authorities for those purposes. Birmingham council's original estimate for an inquiry, based on information given to it, was about £30,000 yet the final bill was almost twice as much. The council is not aware that its grant from central Government has been increased to take that into account.

Sir Paul Beresford: I am aware that a discussion has taken place, but I find that a little interesting. I decided to check and query the matter and to consider the costs.

Mr. Keith Vaz (Leicester, East): They were £68,000.

Sir Paul Beresford: No, they were £63,508. The invoice is dated 3 November 1992. The inquiry lasted 35 inquiry days, five inspection site days and 112 working days for the inspector. I shall not go through the details. It is interesting that a similar inquiry involving a well-known authority that is dear to many of our hearts, Wandsworth, lasted 23 days with four site visits--making a total of 27 days. It had a similar number of objections--

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51,455. On a day-by-day basis, which is not a fair way of doing it, Wandsworth has more reason to complain than Birmingham.

The second main reason why retrospection is justified is that, without retrospection, the other provisions in the Bill would be unfair to planning authorities that, through no fault of their own, have not yet reached the stage of holding an inquiry as part of their development plan process. There is no good reason why planning authorities that have already passed that stage should receive a windfall financial benefit through not including retrospective provisions in the Bill.

By arrangement with my hon. Friend the Under-Secretary of State for Scotland, who will reply to the debate, and for the convenience of the House, I shall say a few words about the Scottish provisions in the Bill. I understand that the position has not been tested in the Scottish courts. In addition, planning authorities in Scotland have not, so far, pressed for repayment of the sums paid in the past. I suspect that that is an example of canny Scots. Nevertheless, as my right hon. Friend the Secretary of State for Scotland thinks that similar problems may arise, he considers it prudent to legislate now to remove any doubt about the basis of charges made.

Clause 3 enables my right hon. Friend the Secretary of State for Scotland to set charges by regulations. It establishes a firm statutory basis for payment by planning authorities in Scotland. That will apply in the case of both local plan and simplified planning zone inquiries. Although that provides equivalent powers to clause 1, there are a number of distinctive Scottish features. First, reporters for local plan or simplified planning zone inquiries in Scotland are appointed not by the Secretary of State, as in England and Wales, but by the planning authority from a list provided by the Secretary of State. That list may include both full-time reporters and other suitably experienced people who are not officers of the Secretary of State.

Secondly, examinations in public into structure plan proposals in Scotland are carried out on behalf of the Secretary of State, so the cost does not fall on the planning authority, as it does in England and Wales. Finally, the Scottish Office inquiry reporters unit remains part of the Secretary of State's Department and is not a next steps agency. Clause 3 reflects those distinctive elements but with the same underlying objective and effect as clause 1 for England and Wales.

Clause 4 makes retrospective provision with regard to local plan inquiries, held under the Town and Country Planning (Scotland) Acts 1969 and 1972. There have been no simplified planning zone inquiries in Scotland yet.

As in England and Wales, neither of those clauses implies any new burden on Scottish planning authorities. They are intended to put on a firmer statutory footing the charging arrangements that have operated for a number of years.

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Mr. Steen: Can my hon. Friend assure me that the amounts that authorities have already paid in relation to their local planning inquiries will not be increased retrospectively?

Sir Paul Beresford: That is absolutely correct. It is a bill that is related to set fees for time and services rendered.

Mr. Rooker: Is it interest free?

Sir Paul Beresford: I will have to check on that.

Mr. Rooker: The Government have repaid some of the money to local authorities and, as I understand it, they have repaid some of the interest payments as well. Some of the payments must go back 20 years. The Government will now collect that money from local authorities. Will they insist on the return of the interest payments? It is bad enough for them to insist on the interest on the principal sum, but insisting on the interest on the interest would be unfair. Would not it be a good idea for the Government--I am sure that the Minister will have thought about this--if every time a Department levied a bill on any citizen or local authority, it had to print on that bill the statutory provision that allowed it to make that charge? It should have to give the legal authority that allows it to make that charge on everything, no matter what. With such a provision, this case would not have arisen. In addition, it would highlight any other cases lurking in Whitehall where the Government are illegally charging individuals or authorities.

Sir Paul Beresford: This does not go back 20 years. It goes back to the discussions with Birmingham which were referred to by the hon. Member for Birmingham, Selly Oak (Dr. Jones). We are talking not so much about a refusal to pay as the fact that the bills have not been collected. If the Bill becomes law, all the amounts due then will be recovered from the authorities owing sums for inquiries.

Mr. Rooker: Without interest?

Sir Paul Beresford: I believe so, but I will let the hon. Gentleman know.

This is a technical and comparatively short Bill that provides formal charging powers that everyone had assumed existed for some 20 years. We are remedying uncertainty. Today we are concerned with the principle of the Bill and the Government are sure that it is soundly based on the principle that it is reasonable for the user of a public service to pay for it, including, as we have just discussed, an essential provision for retrospective payment. I commend the Bill to the House.

4.22 pm

Mr. Keith Vaz (Leicester, East): What a shambles. The Minister has told us that he is announcing a new measure that will provide certainty. In fact, what he has said has created even more uncertainty. He does not know how many years it will go back. In answer to a question from my hon. Friend the Member for Birmingham, Selly Oak (Dr. Jones) he said that it will go back to the discussions with Birmingham. In answer to my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) he said that he does not know whether interest is payable and, if it is, he does not know whether it will be payable from

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the time the money went back or whether it will be interest free. I hope that by the time his colleague the Parliamentary Under-Secretary of State for Scotland replies to the debate he will have studied the Bill more carefully than the Minister so that he can provide firm answers to the questions that we intend to ask.

There is an old proverb about making haste and acting slowly. There is another equally well-known proverb about people paying for their mistakes. This extraordinary Bill is a combination of both. As the House knows, planning legislation is one of the most complex areas of law. Changes in planning law require the most careful consideration, the most diligent consultation with those most affected by the changes and the best possible briefing for Ministers. With this measure, the Government have unfortunately failed in all those areas. There may be two reasons for that. First, perhaps they made a mistake. Secondly, having made a mistake, perhaps they do not want to admit it. This is not the first time that the Government have made a mistake and do not want to admit it.

The House waited in vain to hear the Minister take some responsibility for this legislative mess, but we did not once hear him say, "Sorry, we have made a mistake." There was no contrition and no apology. The Secretary of State could not find time to come to the Dispatch Box and take responsibility himself.

Sir Paul Beresford: As the Bill refers back to the Labour Government's 1968 drafting, I should have thought that the apology ought to come from the hon. Gentleman's party. In addition, I have now had it clarified that where interest has been repaid that interest alone will be recovered by the inspectorate agency. I hope that that clarifies the issue for the hon. Gentleman.

Mr. Vaz: We now hear from the Minister that it was all Harold Wilson's fault and that it is nothing to do with this Government. The Secretary of State could not come to the Dispatch Box to take responsibility for what had happened because he is the good news man who gets to go to press conferences and to launch new initiatives. The Under- Secretary of State is the bad news man who gets to come to the Dispatch Box when the Government get things wrong. It is ironic that that task should fall to a Minister who, of all the Ministers in the Department of the Environment, knows what it is like to be a local councillor and to carry the heavy burdens of a council leader--although he had privatised most of the council's functions by the time he left Wandsworth.

The Minister knows that every spending decision taken by a local authority has to be set against carefully defined criteria. Local government has suffered immeasurably as a result of the Government's cuts in the past 15 years. The Bill will mean yet another burden on local councils, despite what the Minister says. Having discovered that a mistake had been made, councils will have expected to get the money back and to be able to spend it on the provision of local services. When local authorities make mistakes, they have to pay for them.

The Bill is not only about mistakes: the Government have acted illegally, charging local authorities when they had no power to do so--and it has been going on for years. If local authorities had acted in a similarly illegal way, all hell would have broken loose. The Secretary of

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State and his Ministers would have been flying around the country demanding that heads should roll. The councils involved would be harried, ridiculed and pilloried and their councillors would be politically persecuted. Yet when the Government are found to have acted illegally, we are supposed to keep quiet about it. The practice has been going on for years without anything being done about it. The Government seek not only to give themselves power to charge but to do so in respect of past charging errors--and they wish to perform the change "just like that", as Mr. Tommy Cooper used to say. Retrospective legislation is a very dangerous precedent. It is wrong in principle and sets an even more dangerous precedent when applied to local government. It should be used only very rarely. It should not be used when Ministers have flouted the law and the innocent--in this case the councils--are being punished.

Caries, whom I am sure that the Minister has read in preparation for the debate, states in his writing on statute law:

"A statute is to be deemed to be retrospective which takes away or impairs any vested right . . . under existing laws, or creates a new obligation or imposes a new duty."

Referring to the case of Calder v . Bull, Judge Chase said: "Every law that takes away or impairs rights vested agreeably to existing laws is retrospective, is generally unjust and may be oppressive. It is a good general rule that a law should have no retrospect."

Yet those persuasive authorities have had no effect on the Government. Despite the general agreement that retrospective legislation is undesirable, the Government wish to proceed with it in this case.

The director of technical services of Durham city council, in a letter to my hon. Friend the Member for City of Durham (Mr. Steinberg), who had hoped to be here this afternoon, spoke for many councils when he said that the Bill would

"set an exceedingly dangerous precedent if payments which were made with legal authority could be legitimised by subsequent legislation."

As the House knows and as the Minister has briefly explained, development plans, structure plans, local plans and unitary development plans have to be the subject of public scrutiny at public local inquiries, examinations in public and hearings. Objections to the proposals are aired at such inquiries. It is a right that the public should have; it is their opportunity to comment on local plans. Such inquiries are chaired by inspectors appointed by the Secretary of State and drawn from the ranks of the Planning Inspectorate. The inspector listens to arguments and makes recommendations to the local authority. As has now become clear, from the first inquiries, Ministers have illegally charged local authorities for the services of inspectors.

The Planning Inspectorate's corporate plan for 1994-97 predicted that the demand for inspectors for development plan inquiries would remain at current levels. Since 1991, the development plans of local planning authorities have had enhanced status and planning applications are now determined in accordance with the plan unless material circumstances indicate otherwise. They are, therefore, very important parts of the planning process.

In terms of the completion of the plans, there is a long way to go. A survey published by the Minister's Department in August 1994 showed that only 60 English

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districts--20 per cent.--had local plans in place by 31 March 1994. It showed that only 10 unitary authorities--15 per cent. of the total--had unitary development plans. More than 94 per cent. of English authorities are expected to have adopted plans by the end of 1996. In Scotland, as my hon. Friend the Member for Dundee, East (Mr. McAllion) will explain, about 81 per cent. of local plans had been adopted by the end of 1993. The Scottish Office, as I am sure the Under-Secretary of State for Scotland will tell us, expects complete local coverage by the end of this year.

It was Birmingham city council that first raised the issue of the statutory basis for charging by the Secretary of State following, as the Minister has told us, the public local inquiry into the Birmingham unitary development plan. The House and the Government owe a debt of gratitude to the officers and members of Birmingham city council for their role in discovering the Government's error. I also commend the tremendous efforts made by my hon. Friends the Members for Perry Barr and for Selly Oak and by the other Birmingham Members who wrote to Ministers pointing out the error of their ways. The Birmingham inquiry lasted from November 1991 to February 1992. The inspector's report was received in October 1992, some months later. In November, as the Minister has said, the council received an invoice for £63,000 which exceeded its budgetary provision of £28, 000. The reason was not that Birmingham had, in some way, done something to put up the bill. The reason was that the inquiry lasted longer than anticipated-- 38 days instead of 32. In addition, there was a unilateral 30 per cent. rise in the inspectorate's day rate charges of which the council was notified shortly before the inquiry opened. That bill was challenged on two counts: first, the size compared with what was estimated and, secondly, the statutory basis for the charge. On 24 June 1993, the assistant director of planning, Mr. Wenban Smith, wrote to the planning inspector, Mr. John, pointing out that as no regulations had been made under section 16 of the Town and Country Planning Act 1990 there was no statutory basis for the charge. It was further attested by Birmingham that had the charges been the same as those prescribed under the Fees for Inquiries (Standard Daily Amount) Regulations 1988--which I am sure that the Minister has studied-- the bill would have been half the size. No reply was received by Birmingham city council to that letter. It was not until a year later, when Members of Parliament wrote, that the Minister's predecessor replied.

The House would have expected that on discovering the error the Government would have ensured the widest possible consultation with the associations and with individual councils so that they could implement the proposed changes, going through in great detail any proposals of legislation--but not a bit of it. In February 1994, just under a year ago, the Association of Metropolitan Authorities received a letter from the Department of the Environment referring to "some doubts" over Ministers' powers to make charges. The letter also said that "to clarify the situation" the Government intended to introduce retrospective legislation shortly.

The AMA, after consulting its members, sent a reply via Mr. Phil Harper, who wrote to the DOE objecting to the Government's proposals, especially their retrospective

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nature, and arguing further that in future the costs of the inspectors should be borne by the Government. The AMA received the letter from the DOE on the same day as a written answer appeared on the same subject--17 February.

More evidence of the Government's unwillingness to consult--the Minister has spoken today of consultation with the authorities--came in a letter from Mr. D. Donaldson who works in planning division 4. Mr. Donaldson was responding to a letter from the Association of District Councils dated 1 November 1994. It took six weeks to reply to that letter. Millions of pounds of local taxpayers' money has been illegally grabbed by the Government. Mr. Donaldson, no doubt under ministerial instruction, says in paragraph 2 of that letter: "While we understand the reasons for the Association's concern, the Department does not accept that there has been a `significant legislative error'."

If that is not regarded as a significant legislative error requiring retrospective legislation, I wonder what is. In paragraph 3, Mr. Donaldson says:

"The proposed legislation would be retrospective in order to validate payments which authorities have already made and to achieve equitable treatment for all planning authorities, irrespective of the time when their particular local plan inquiry was held."

So, the Government want to be fair and equitable to all concerned. They are not going to rob Peter to pay Paul--they are going to rob both Peter and Paul.

In all the consultations carried out so far, not one local authority feels that the principle of retrospection should apply. If the Act is passed, they will want payment to start from the time when the Act is passed, not from a previous decade. The local authorities say that that is a fair and honest way to proceed and the Labour party agrees.

The Minister has told us that in his view £4.5 million up to the financial year 1993 and £1.4 million up to the financial year 1994 was owed by local authorities. Just to set the mind of the hon. Member for South Hams (Mr. Steen) at rest, it is not a question of Birmingham council not paying or refusing to pay up. There is no legal authority and there was no legal authority for the councils to pay at all. I am sure that the hon. Gentleman would not want to pay a bill when he had no legal authority to do so. The bills were sent when there was no authority to do so.

I am glad that the Minister was able to take advice and tell us about the interest. But we are not talking only of a global sum of some £7 million. For local councils these are very large individual sums. For example, Chichester will have to pay almost £20,000, Rochester £17,000, and Reigate and Banstead £75,000. I have not chosen examples of hotbeds of socialism. However, I have to throw in my local area of Leicester, which will have to pay £40,000. Individual councils will have to receive and then pay back a very large sum of money.

On learning that there was no legal authority, the Planning Inspectorate refunded payments to local councils, informing them that the money would be clawed back when the legislation was passed. It must have been like a scene from the Keystone Cops. Each Minister in the Department of the Environment must have been given the responsibility of going in a fast car full of cash to hand it back to the town halls. Bearing in mind the Minister's fondness for privatisation, they perhaps engaged Group 4, or even Mr. Damon Hill, all with the same instructions: drive fast, do not stop, and if apprehended, blame it on

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the lawyers. I can just see the cartoon in next week's Municipal Journal. It would be farcical if it were not so tragic--what a way to run a Department.

We are very concerned about the scope of the charging regime. The proposed new section 303A(4) would allow the Secretary of State to recover

"the entire administrative cost of, or incidental to, the qualifying inquiry, so far as borne by him".

That appears to go well beyond the "remuneration and allowances" provision in the Town and Country Planning Act 1990. It appears that the Secretary of State is seeking to recover costs other than for those of appointing an inspector. When the Under-Secretary of State for Scotland replies, I hope that he will give us the cast-iron assurance that there is no intention to make charges over and above those made in the past.

Mr. Rooker: Perhaps my hon. Friend will press the point that, with regard to new section 303A(4), in addition to the amount for an inspector, the Government intend to charge for the overheads of the Department of the Environment. What on earth have the DOE's overheads got to do with appointing an inspector with a dedicated staff and a dedicated task in mind? Why should local authorities bear a share of the costs of the DOE's overheads?

Mr. Vaz: I am most grateful to my hon. Friend. I expected him, the hammer of the poll tax and the Opposition Member who did most to bring down that hated piece of legislation, to spot that. The proposal goes far beyond what was originally intended and far beyond the 1990 Act which refers simply to "remuneration and allowances". I hope that the Minister will give us the assurance that we need when he replies.

I believe that there is a clear need to cut the costs of inquiries. Research commissioned by the DOE showed that local inquiries can cost as much as £170,000 for local plans and £300,000 for unitary development plans. The executive summary of the "Efficiency and Effectiveness of Local Planning Inquiries" stated that some of its recommendations were intended to

"provide more certainty for local authorities and others in budgeting time"

and ensure that a more businesslike relationship should exist "between the local authority and the planning inspectorate." The summary document was issued for consultation on 10 November 1993. The DOE said on 21 December 1994 that the full report would be published "imminently". When the Minister replies, I hope that he will tell us the date of the report's publication. He will know that one of his colleagues said on 17 February that the report was to be published "shortly". We await the proposals with interest and wonder why it has taken a full year from executive summary to the final report. We should like to hear how the Government propose to improve the local plan process. It should not be just a booking exercise; it should be much more substantial.

Another and equally important argument goes to the heart of this matter and relates to the very principle of whether local authorities should have to pay in the first place. There is a view that, as a council is obliged by statute to prepare the plans and to hold the inquiries, the

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financial burden should be borne by the Government-- [Interruption.] I notice that that view has found favour among Conservative Members. I am delighted that they agree with the Association of Metropolitan Authorities which holds that view.

Other organisations take a different view. The Royal Town Planning Institute considers that if the Government paid the cost of the inspectors that might lead to a return to the pre-1968 situation of central Government having the final say in the adoption of local development plans. The institute believes that that would not be in the interests of effective planning or local democracy.

The point is that this legislation, far from being a "wee Bill", as the Under-Secretary of State for the Environment described it, to be shoved through when no one is watching, gives us an opportunity to examine carefully a very important point of principle. We should listen to the views of the interested parties before we take a final view.

The Opposition believe that once there is a statutory basis for charging, the relationship between the council and the inspector should be formalised. It should be that of purchaser and provider. I am sure that the Minister recognises those words as he was very keen to push them forward in Wandsworth.

At present, the basis of a council's dealings with the inspectorate are open-ended in favour of the contractor. The client--the council--has very little, if any, control over the outcome in terms of the delivery date or price. The inspectorate should be required to give, and abide by, its estimates. A written statement should be provided in advance based on the circumstances of the case with any factors affecting variability--for example, sitting days--clearly identified.

There should be provision for arbitration which is binding on both parties. There should also be a mechanism for challenging a demand which a local authority considers unreasonable. Under the provisions in the Bill, the Secretary of State can merely recover the costs through the courts. There should be proper regulation to ensure that the contractor's position of power and monopoly is not abused. That is entirely in line with the Government's wish to see the inspectorate as a trading agency.

We believe that there is considerable scope for improving the operation of the inquiry scheme with regard to the greater use of written objections and shorter reports and developing a more informal approach with the local authority taking the lead in bringing objectors' concerns forward more effectively. Because of the new-found importance of development plans, it is always possible for particularly well-heeled objectors to delay the process to get their point across because they can afford expert representation. The costs of the inquiry will therefore spiral.

We believe that planning authorities should involve local people in preparing plans at a much earlier stage. It is essential that the public are able to participate as early as possible. I was very impressed by the observations of the Royal Town Planning Institute on the Government's initial proposals. I do not believe that any hon. Member would disagree with the comments of Jed Griffiths, the senior vice-president of the institute, who said:

"We need to get local people involved right at the roots of the planning process so that they can play a real role in shaping the future growth of the places where we live."

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I am announcing today the establishment of a Labour party review of planning law. I hope that we will consult widely with all interested parties to make planning law a much more consumer- friendly part of legislation and the planning function much more understandable by local people. I want to see planning by local people for local people and planning for prosperity--the prosperity of local people in local areas.

Mr. Steen: In his interesting speech, which I have been following very carefully, is the hon. Gentleman suggesting that parish councils should have planning powers?

Mr. Vaz: No, I am not. Far be it from me to stand at the Dispatch Box and reorganise local government. However, there is no reason why members of parish councils should not feel that they have a role to play as members of the public and go to meetings and participate in the process.

The Government have been caught with their hands in the pockets of local authorities and we all know what happens to pickpockets. If the Government had charged the private sector without lawful authority, there would rightly be an outcry and Ministers would have to cough up and apologise. No wonder, simply to cover ministerial backs, the Bill explicitly states:

"The Bill will have no effect on businesses as regards compliance costs."

In our view, the Bill is bad and it has been drafted in haste. The Opposition have been given an assurance through the usual channels that before the Bill goes into Committee there will be a period of consultation with the associations and other interested parties. We shall hold the Government strictly to that promise. We shall therefore not vote against Second Reading today, but if we find that the Government are not prepared to consider their position on the issue of retrospection and are not willing to accept the reasonable proposals that we shall set out in Committee, I can assure the House that we shall be in a bare-knuckle fight with the Government in the later stages.

It would be improper for the House to allow the Bill to pass before the Government are rightly condemned for their actions and are able to apologise for what has happened and it would be a negation of our duty as an Opposition if we allowed the measure to reach the statute book in its present unfit and unjust state.

4.48 pm

Mr. Anthony Steen (South Hams): After the successful passage of the Deregulation and Contracting Out Act 1994, the Government's principal new year's resolution must surely have been absolutely straightforward: "We just won't introduce new, unnecessary legislation. We will positively discriminate against passing any new laws which are not proved to be absolutely necessary." After all, that would be entirely consistent with the recent resolution of the House to reduce the number of hours that Parliament sits. Surely, if the House sits for fewer hours, prima facie it should pass fewer laws. Unfortunately, this is only the third parliamentary working day of 1995, and the House, believe it or not, is scrutinising a seemingly additional piece of legislation and adding it to the thousands of edicts that we churn out every year, many of which are entirely unnecessary.

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Rather like habitual smokers, too many Ministers and their officials seem unable to resist the temptation to participate in their favourite pastime--passing laws. In most people's eyes, that is the justification for Parliament's existence, for, if we are not passing laws, what are we doing, they say. Whether laws are necessary does not seem to be questioned. Passing laws has become an end in itself, and the lifeblood and justification for the existence of Parliament. If we do not pass laws and we do not debate, we cannot justify our existence.

The addiction now has such a great hold that it seems to have affected not only Ministers of all rank but civil servants, whose modus operandi seems to be entirely dictated by how much legislation they can get their Minister to pass and how many columns of Hansard and how many lines on the statute book they can fill. Are the Government proposing a performance-related bonus for civil servants according to how many lines of legislation they put on the statute book?

The Bill is about the Government recovering from local authorities costs attached to certain inquiries. The inspectorate and the reporters unit has always charged for the costs involved in development plan inquiries. Indeed, even without any statutory basis, local authorities have paid up without much problem, to my knowledge, other than in the significant Birmingham case.

Why did Birmingham challenge the legal basis of charging? As I recollect, it questioned it because the planning inspector was extremely dilatory in delivering his report. Birmingham said, "If you are charging us for this report, we would like it promptly. If you do not give it to us promptly, we will withhold payment." That seems to be a perfectly legitimate argument.

In short, the existing system has worked well, even without statutory force. Therefore, one must ask: "What are the benefits of moving from a successful consensual agreement to a formal legislative framework?" Why take up the time of the House? Why increase legislation on the statute book, with all the associated bureaucracy? Why do we not leave matters voluntary? That is what the Conservative party is all about.

Has the Birmingham challenge led to a flurry of similar cases from other local authorities? I do not believe that it has. The Government, not local authorities, have reacted. If there has been such a flood, it may be because of unconscionable and unreasonable delays in producing reports. It is a bit rich to clobber local authorities with a statute compelling them to pay if, at the same time, there is no local authority charter.

I wonder whether my hon. Friend the Minister will think about a local authority charter which would ensure high standards of practice and which must include the prompt production of reports. It seems perfectly right that a local authority, if it is asked to pay for such reports, can say that there must be a charter which says that reports must be produced in two months, or there will be a reduction in charges made--just as, under the charter, one receives 20 per cent. back if a train arrives more than an hour late.

There is another question: should charges be imposed at all? The hon. Member for Leicester, East (Mr. Vaz) touched on that point. Local authorities are obliged to prepare plans. That is the law. However, whenever plans are drafted, individual objections from local people are

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